Creative Accounting and Investor Value: A Comparative Study of Income Smoothing of Listed Manufacturing Firms in Nigeria and South Africa

Authors

  • OZONDU, Mary Eberechukwu Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • IWARA, Okoi Etim Department of Accounting, University of Calabar, Calabar, Cross River State, Nigeria.
  • OKEKE, Stella Ehis Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • UDEFI, Geoffrey Ndubuisi Department of Accountancy, Alex Ekwueme Federal University, Ndufu Alike, Ebonyi State, Nigeria.
  • ROMAINE, Azubuike Clifford Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • CHINWEUBA, Faith Ukamaka Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • OHABUENYI, Peter Chukwuka Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • ONAH, Uju Francisca Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.
  • CHUKWUNWIKE, Onyekachi David Department of Accountancy, University of Nigeria, Enugu Campus, Enugu State, Nigeria.

DOI:

https://doi.org/10.53935/jomw.v2024i4.749

Keywords:

Creative accounting, Income smoothing, Investors value, South Africa, Tobin’s Q, Nigeria.

Abstract

Given the mixed results of prior studies, this study determined the effect of creative accounting on the investor value of listed manufacturing firms in Nigeria and South Africa from 2012 to 2022. The study investigated the effect of income smoothing on Tobin’s Q of listed manufacturing firms in Nigeria and South Africa. The study obtained data from Thomson One Banker concerning 25 and 44 manufacturing firms listed on the Nigerian Exchange Group and Johannesburg Stock Exchange respectively. The study reveals amongst other things, that income smooth does not significantly affect the investor value of listed manufacturing firms in Nigeria and South Africa. Also, one of the findings indicates that profitability significantly and positively moderated the income smoothing-investor value relationship of listed manufacturing firms in Nigeria and South Africa. The study recommends that firms reconsider their income-smoothing strategy, and factor in profitability in their income-smoothing decision.

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Published

2025-01-15

Issue

Vol. 2025 No. 1 (2025)

Section

Articles